In summary, printing an equity Minsky mania is counter productive. The 1% dividend at the peak of the Y2K Minsky was one symptom of the problem that wanton printing had wrought on the economy. The economy will under perform for a season because of the Minsky, with its 1% dividend.

CAPE:
1) It currently contains not one, but two earnings recessions. In 24 months, that's no longer true and its value will automatically fall.
2) The 16x historical average is meaningless, since those data begin in 1871, when industrial stocks sold at 4-5x earnings. Post-1951, the average is 19.
3) The 12-month trailing PE is 13. I'm not displeased with that. Further, small, value, and foreign stocks are even less expensive compared with historical values; the EAFE is approaching single-digit PEs.

I seem to recall that during the late 1990's individuals proposed alternative valuation metrics. They said earnings did not value eye balls or clicks. Valuations of an investment based on historical earnings or the replacement cost has a long history for comparison. Arguing for higher prices based on intangible prices runs the risk of paying more than you receive. It is hard enough to measure the intangible asset let along put a price on it. Better yet, Benjamin Graham wrote about inflating prices based on intangible assets in 1934 book "Security Analysis".
Maybe we should all read his findings again
Jamie Cornehlsenwww.dunnwarren.com

A low payout ratio means that companies can use the retained cash to invest and grow future earnings (and thus dividends). It would be a good argument if there were evidence to support it. But the data point to the contrary conclusion.

Wouildn't it me bore accurate to say that, "while retained cash can indeed be used to invest and grow future earnings, in practice is usually isn't."?

This is, actually, the same as the flaw in the would-be tax-cutters argument that raising taxes on wealth will inhibit investment (and so reduce growth). Wealth, too, can result in investment. But the evidence for how frequently it actually does so in pretty thin.

You suppose that new market entrants and expanding legacy firms will cause reversion to the mean for the Q ratio; yet this relies on an unstated assumption: that these supposedly intangible assets are not scarce.

Were a growing share of total scarce assets to be intangible, then we would indeed observe a sustainably increasing Q ratio.

Now, this would be a very bold stance, and your assumption is a good place to start. We should rightly be skeptical - this sounds far too much like hype. Yet, we must always be open to empirical evidence, and the score is still out on this one.

Intangible assets really do exist: skilled (specialist) employees with weak bargaining powers; favorable government regulation and a position to influence new regulation; technical secrets; a strong bargaining power vis-a-vis particular suppliers; access to customized open source software... Many such assets really are scarce in the sense that start ups can't easily find them; they are also often hard to scale with production quantity, and even hard to expand with new investment within legacy firms.

What interests me in this post is the acknowledgment that constraint is good. This is counter to trend; people are clamoring for reducing constraint. Some do this out of conviction, often religious, about freedom. Others imagine less constraint equals growth. As the post notes, constraint is focus. It generates efficiency.

Successful systems generate meaningful constraints. Japan, for example, reversed the production process by limiting what is allowed out. That constraint pushed efficiency back through the line and then into suppliers.

In the US, we are tremendously resistant to constraint. We also don't like to be constrained by facts.